Mutual funds & sip
⌵
Mutual Funds
It’s a very good option for getting Higher Returns, but has no guarantee.
There are 2 options. First one is a Lump-sum Investment and other is a SIP.
Normally Mutual Funds will take care of your Short term goals very well Like, buying a new Car, Down payment for your dream house, international Vacation etc. All your life you would be striving for all these things and will be requiring money at every step. Thus Mutual funds will help you achieve your above goals. This also means that there are very little chances that you may save amount for your retirement. On the other hands Life Insurance policies will be with you for Long term, as they cannot be with drawn easily.
Potential for Higher Returns
- However, they are more likely to earn more than most investors and that is why mutual funds are a possibility and not a guarantee.
Investment Options
- specific forms of investment are apparently, Lump-sum investment, you invest once and for all, and the SIP (Systematic Investment Plan) with contributions made periodically.
Ideal for Short-Term as well as Long Term Goals
-
Basically, mutual funds are best suited to short term needs such as:
- Buying a new car Down payment of a house
- Financing of Intercontinental holidays. -
Mutual Funds are also best suited for term needs such as:
- Retirement Planning
Pension Creation.
Children's Education and Marriage provision
Funds has to be appropriately selected for Long term Planning and Financial Discipline is also required.
Thus seperate planning is required for Shor term and Long Term Planning and it can be only done by a Professional Advisor. These goals can never be achieved by online Platforms.
Flexible but Short-Term
- However, mutual funds give flexibility on saving than the other structures and allow withdrawals making it difficult for long-term saving of /for instance retirement.
Long-Term Security with Life Insurance
- As with most policies, people are expected to commit to life insurance for long term and due to their nature are not easily accessed for cash with the convenient as they are meant to meet future needs.